Government projects India's digital economy at about 12% of GDP

23 Jan 2025 Evaluate

The government has estimated the size of India's digital economy at 11.74% of Gross Domestic Product (GDP), in a first-of-its-kind exercise. In absolute numbers, the digital economy in 2022-23 was equivalent to Rs 31.64 lakh crore (around $402 billion) in GDP. The digital-enabling industry, which includes sectors such as information and communication related services, telecommunication (traditionally referred to as the ICT sector), and manufacturing of electronic components, computers, and communication equipment, is the highest contributor, accounting for 7.83% of GVA.

The new digital industries, which include Big Tech players, other digital platforms and intermediaries, and firms dependent on digital intermediaries, account for nearly 2% of GVA. The digital contribution of three traditional industries (BFSI, trade, and education), which are not part of the OECD framework but are included in our estimates, amounts to 2% of national GVA, rivalling in importance to the new digital industries.

This is a clear indication that India’s digital economy is steadily moving beyond the realm of the ICT industries, diffusing across all parts of the economy through digital platforms and the digitalisation of brick-and-mortar sectors. India’s digital economy is expected to grow almost twice as fast as the overall economy, contributing to nearly one-fifth of national income by 2030. In the short run, the highest growth is likely to come from the growth of digital intermediaries and platforms, followed by higher digital diffusion and digitalisation of the rest of the economy. In 2022-23, the digital economy accounted for 14.67 million workers, or 2.55% of India’s estimated work force.